UK charity denied permission to lower indexation in landmark case

first_imgThe BT Pension Scheme’s trustee board wants to ditch RPIPinsent Masons’ Scholefield said the next big test for the RPI/CPI debate related to the BT Pension Scheme. The UK High Court ruled against the trustee board of the BTPS earlier this year in relation to its attempt to switch from RPI to CPI for inflation-linked benefits, but the trustees appealed to the Supreme Court.“In the BT case, the wording is about whether RPI has become inappropriate,” Scholefield told IPE. “This is much more subjective. It’s a much more principles-based discussion than the issue that the Supreme Court had in [the Barnardo’s] case.”He added that the BT ruling would be “much more significant” for UK pension schemes, because if RPI was deemed to be “inappropriate” as a measure of inflation it could prompt schemes with more flexibility in their rules to move to alternative measures – which could potentially reduce liabilities. The UK Supreme Court has ruled that a charity cannot change the way it calculates inflation-linked uplifts to defined benefit (DB) pension payments.In the landmark ruling yesterday, judges unanimously ruled that children’s charity Barnardo’s could not shift its inflation measure from the UK retail prices index (RPI) to the consumer prices index (CPI). CPI is typically lower, meaning the change would have likely reduced future payouts.However, lawyers said the ruling was unlikely to set a precedent for many other UK schemes as it related to the particular wording of the Barnardo’s scheme rules.Stephen Scholefield, pensions partner at Pinsent Masons, said: “Those who were hoping for a fundamental rubbishing of pension schemes using RPI will be sadly disappointed. As ever, trustees and employers should think carefully about what their schemes rules actually say, even if this might not give the outcome they want.” Credit: Walter Baxter A Barnardo’s shop in Scotland“This is a rule of which the drafting is likely to have evolved over time. This means that some members will be entitled to RPI, some CPI, and some may be subject to a change to the index either at the discretion of the trustees, the employer, or both.”According to the judgment, the rules of the £688m (€790m) Barnardo’s scheme defined RPI as “the General Index of Retail Prices published by the Department of Employment or any replacement adopted by the trustees without prejudicing approval”.The rules also stated that pension payments should be increased in line with RPI “with an appropriate restatement… if the retail prices index has been replaced or rebased during the period”.The judges ruled that this meant the trustees could only move away from RPI if it was formally removed as a measure of inflation by the government. Although it is used less often than other measures, RPI remains an official UK statistic.A bigger case on the horizoncenter_img Jane Kola, partner at ARC Pensions Law, said: “The decision confirms that the index to be used to increase benefits in both deferment and in retirement depends on the exact wording of scheme rules as they apply to members.“There is no hard and fast rule that schemes can or can’t change their index. Schemes need to ensure that they have looked at all of their rules, not just the last set.last_img read more

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Europa League final: Kante starts for Chelsea, Ozil in for Arsenal

first_imgN’golo Kante starts for Chelsea in tonight’s Europa League final in a major boost for the Blues, having been a huge doubt after he picked up a knee injury in training.Olivier Giroud also starts up front with Eden Hazard, possibly featuring in his last game for Chelsea, also in the starting eleven.Arsenal start with both Pierre-Emerick Aubameyang and Alexandre Lacazette up front with Petr Cech keeping his place in goal in what is his last game before he retires.Lineups:ARSENALGoalkeeper: Petr Cech Defenders: Sokratis Papastathopoulos, Laurent Koscielny, Ainsley Maitland-Niles, Sead Kolasinac, Nacho Monreal Midfielders: Lucas Torreira, Granit Xhaka, Mesut Ozil Forwards: Pierre-Emerick Aubameyang, Alexandre LacazetteCHELSEAGoalkeeper: Kepa Arrizbalaga Defenders: David Luiz, Andreas Christensen, César Azpilicueta, Emerson Palmieri Midfielders: Jorginho, Kante, Mateo Kovacic Forwards: Eden Hazard, Pedro, Olivier GiroudThe gameChelsea take on Arsenal later tonight in the final with more than just a trophy at stake.For the Gunners, this is their last chance to make it into next season’s UEFA Champions League having missed out on a top four place in the Premier League.And for Chelsea, this is a chance for them to show that they remain a force in Europe despite a turbulent season that has seen fans publicly deride their new manager and some of their players in games and left their manager unsure of his future at the club despite reaching two finals and finishing third in the league.Unai Emery’s Arsenal go into the final with relatively their first team intact, only missing Aaron Ramsey through injury and Henrikh Mkhitaryan after the Armenian decided not to travel to Azerbaijan due to political tensions.Emery has decided to play his two top strikers together from the start, something he had been reluctant to do until much later in the season.Ozil, whose importance to the first team has dipped this season under the Spaniard has also been handed a start in this crucial game for the Gunners.It’s however in defence where Arsenal are shakiest. Emery has opted for a three-man central defence of Sokratis, Monreal and captain Koscielny to deal with Chelsea’s goal threatEmery has also handed his first choice keeper for their entire European campaign, Petr Cech a start with Leno left on the bench.The Blues’ build-up to the final has been all-but ideal. Having to deal with long-term injuries to Antonio Rudiger; starlet, Callum Hudson-Odoi; Reuben Loftus-Cheek and recently to N’golo Kante.Chelsea are also having to fend off rumours that manager, Maurizio Sarri has agreed to become the new manager of Juventus.The club also seem destined to lose their star player Eden Hazard, who could be playing his final game for them tonight.last_img read more

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